Confident optimism

People don’t decide between brands on a purely rational basis; 80 percent of the time, when making decisions about products and services, they usually go with their gut feeling.

Let’s face it: success is elusive. Why do so many brands fail when 60 percent of consumers who switch from their current brands are identified as “satisfied”? Obviously, and as research figures support, satisfaction is not enough to maintain the desired loyalty. Confronted with this reality, the challenge that marketers face is how to drive customers from a zone of defection to a zone of affection, from being switchers to loyalists.

The facts about customers are stark. They are as simple as one, two, three. First, businesses need customers since that’s where the money comes from. Second, businesses need to bring in customers, which means delivering something discriminating customers want. That “something” is not just products and services, but a holistic brand experience that flexibly matches the complex psyche of targeted consumers. And third, businesses need to keep customers. The investment in retaining a customer is much less than attracting a new one, and losing existing customers means losing all the lifetime value of the brand. This translates, in a lot of instances, to big money.

Against this backdrop marketers agree on one thing: people don’t decide between brands on a purely rational basis. They may offer rational explanations during a focus-group discussion or an in-depth interview, since in most cases they can’t express their true feelings in a research atmosphere. Eighty percent of the time, consumers agree that when making decisions about products and services, they usually go with their gut feeling.

Neurologists corroborate this statement. They believe that emotions and decision-making are linked in the brain, and both rely on the same neural network. Emotions trigger preference for taste, smell, visuals, sound or feel. Reason draws up the list to choose from, but emotion makes the final choice. Thus, the task of the marketer is to figure out which emotions would trigger preference for a brand.

Feelings make the difference

While it is easy for marketers to get distracted by the power of data and technology, a new report reminds us what really drives business decisions: feelings. “The Business Feeling Index: The Feelings that Move Business Forward” report, conducted by the Financial Times Commercial Insight Group in collaboration with a leading global business-to-business advertising agency Gyro (a Dentsu Aegis Network Company), asked respondents across the globe to express which feelings are crucial for creating successful business relationships.

The findings were augmented by qualitative research, via Russell Research, and interviews with eminent marketers and the top academic in the field of emotion in marketing, Michel Tuan Pham of Columbia University. They said that amid today’s heightened global climate of uncertainty, one feeling has proven to be the most powerful of all — “confident optimism” — an emotion that arises when decision makers are not only assured of a company’s expertise, but also feel a strong sense of optimism about what their partner can do for their business.

The study cited the following key builders of confident optimism:

Content: Customers demand dependable evidence that businesses are not only experts, but that they will bring innovative thinking to the partnership. That’s why 70 percent of respondents said that thought leadership — the development of compelling and differentiated ideas — is the most important element during the research phase. Rhonda Shantz, CMO of a leading digital security firm, was quoted, “In today’s world of sameness, thought leadership is one of our highest criteria when selecting our vendor partners, especially when they are able to tie that thought leadership to results.”

Culture: 83 percent believed that company culture — the personality of an organization that defines the environment in which employees work — is among the most important attributes in selecting a business partner. Company culture includes a variety of elements: work environment, company mission, value, ethics, expectations, and goals. In an interview, Karagh Keough, a global marketing director averred, “Culture is everything. It is built around our purpose to create rewarding opportunities and amazing spaces where people can achieve their ambitions — and our clients share this purpose.”

Crisis management: 86 percent of respondents affirmed that the first moment of friction in a relationship is where you really find out about your partner. Successful handling of the crisis inevitably leads to a stronger relationship. At the same time, crises should not be viewed as negative. Crisis time should be the time to shine. Transparency, honesty and responsiveness are crucial when a challenge or problem arises. Jeremy Verstraete, senior director of marketing, United States Gypsum shared, “We have the same expectations from our partners that we have for our own teams. This means there needs to be candid and direct feedback. They need to act with urgency and they need to hold their team accountable. The situation must be evaluated, a corrective action created, and a follow-through mechanism is planned and implemented.”

Communication: More than three-quarters of respondents strongly agreed with the statement that communication is the connective tissue of a business relationship. This was an absolute truth among successful business relationships. Poor communication, conversely, is the most likely factor to stall a relationship, followed by a lack of transparency. The top communication mistake is overpromising. Ayesha Durante, head of marketing, HP Printing Systems, Asia Pacific and Japan emphasized, “Authentic, consistent and relevant communication is critical for earning the trust needed to build a customer relationship.”

Concluding strongly: 65 percent of respondents said the feeling they most want to walk away with is a feeling of accomplishment. They want to feel that the mission was a success. No time to run out of gas, lose attention to detail or make a mad rush to get deliverables out the door. There needs to be a structured end to the relationship and a powerful sense of closure. The key drivers for the end stage: Do quality work, wrap up loose ends in a positive fashion, don’t make excuses, and “make me optimistic about the next time.” These are essential drivers for repeat business and referrals, because only then the cycle will start anew.

Key killers of confident optimism: The feeling of uncertainty had the most negative impact, according to 77 percent of respondents. Other factors that are detrimental include overpromising (69 percent), poor communication (60 percent), lack of transparency (53 percent), arrogance (69 percent), and pushiness (61 percent).

Other findings

Now, more than ever, marketers must focus on what their customers and prospects are feeling and deliver in a way that makes them feel both confident and optimistic. Human relevance in marketing has never been more valid and necessary.

Contrary to common assumptions, people tend to use their feelings a lot and across a variety of contexts, including those that are supposedly meant to be rational. For example, in a study of consumer responses to over 1,000 TV commercials, we found that emotions that consumers felt in response to commercials predict their brand attitudes regardless of the product category involved (e.g., insurance vs. perfume).

First impressions matter a lot, and seemingly “small” negative emotional experiences can detract a lot.

In the rational world of business, marketers should zero in on the emotions that matter most. “Confidence is everything in a business relationship,” the study found. “Coupled with optimism, this fuels success for both the short and long term.”
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The Philippine Retailers Association (PRA) first came into being as the Chamber of Philippine Department Stores and Retailers, Inc. (CPDSRI) in 1976. In 1991, after winning the bid to host the 6th Asian Retailers Conference and Expo, the bi-annual event of the Federation of Asian Retail Associations (FARA), the Chamber changed its name into Philippine Retailers Association and adopted the now famous shopping bag logo.